Just weeks before Blackwater guards fatally shot 17 civilians at Baghdad’s Nisour Square in 2007, the State Department began investigating the security contractor’s operations in Iraq.But the inquiry was abandoned after Blackwater’s top manager there issued a threat: “that he could kill” the government’s chief investigator and “no one could or would do anything about it as we were in Iraq,” according to department reports.

Shares of DVN Holdings, controlled by Hong Kong businessman Johnson Ko Chun-shun and state-owned Citic Group, surged 7.3 per cent after it appointed Erik Prince – former owner of controversial US security firm Blackwater – as chairman, and granted him more share options.

Prince last November sold to DVN a company that plans to build a pan-Africa provider of aviation, logistics, risk management, security services and exploration support services, needed by many Chinese businesses active in Africa. He received US$3 million plus the first batch of options.

Prince has logistics, aviation, manufacturing, resources and energy business interests in Africa, the Middle East and North America, and is the founder of Frontier Resource Group, a private equity firm active in African aviation, exploration, mining and logistics, DVN said.

The firm subsequently paid US$42 million in fines for hundreds of violations of US export rules, to avoid criminal charges, The New York Times reported.

The writing was on the wall back then, and it appears the Department of Justice has finally picked up on the shadiness of it all.

Earlier today, The Intercept published a detailed account of the ongoing investigation into America’s number one mercenary, Erik Prince. Here are a few excerpts:

Erik Prince, founder of the now-defunct mercenary firm Blackwater and current chairman of Frontier Services Group, is under investigation by the U.S. Department of Justice and other federal agencies for attempting to broker military services to foreign governments and possible money laundering, according to multiple sources with knowledge of the case.

What began as an investigation into Prince’s attempts to sell defense services in Libya and other countries in Africa has widened to a probe of allegations that Prince received assistance from Chinese intelligence to set up an account for his Libya operations through the Bank of China. The Justice Department, which declined to comment for this article, is also seeking to uncover the precise nature of Prince’s relationship with Chinese intelligence.

The Intercept interviewed more than a half dozen of Prince’s associates, including current and former business partners; four former U.S. intelligence officers; and other sources familiar with the Justice Department investigation. All of them requested anonymity to discuss these matters because there is an ongoing investigation. The Intercept also reviewed several secret proposals drafted by Prince and his closest advisers and partners offering paramilitary services to foreign entities.

In 2010, amid public scandals and government investigations, Prince began to sell off his Blackwater empire. Using new vehicles, he continued to engage in controversial private security ventures, including operations in Somalia and the United Arab Emirates. Eventually, the former Navy SEAL and self-proclaimed American patriot began building close business ties with powerful individuals connected to the Chinese Communist Party. In January 2014, Prince officially went into business with the Chinese government’s largest state-owned investment firm, the Citic Group, and founded Frontier Services Group, which is based in Hong Kong. Citic Group is the company’s single largest investor, and two of FSG’s board members are Chinese nationals.

Working with a small cadre of loyalists — including a former South African commando, a former Australian air force pilot, and a lawyer with dual citizenship in the U.S. and Israel — Prince sought to secretly rebuild his private CIA and special operations enterprise by setting up foreign shell companies and offering paramilitary services, according to documents reviewed by The Intercept and interviews with several people familiar with Prince’s business proposals.

Since 2014, Prince has traveled to at least half a dozen countries to offer various versions of a private military force, secretly meeting with a string of African officials. Among the countries where Prince pitched a plan to deploy paramilitary assets is Libya, which is currently subject to an array of U.S. and United Nations financial and defense restrictions.

Prince engaged in these activities over the objections of his own firm’s corporate leadership. Several FSG colleagues accused him of using his role as chairman to offer Blackwater-like services to foreign governments that could not have been provided by the company, which lacks the capacity, expertise, or even the legal authority to do so.

“He’s a rogue chairman,” said one of Prince’s close associates, who has monitored his attempts to sell mercenary forces in Africa.

That source, who has extensive knowledge of Prince’s activities and travel schedule, said that Prince was operating a “secret skunkworks program” while parading around war and crisis zonesas FSG’s founder and chairman. “Erik wants to be a real, no-shit mercenary,” said the source. “He’s off the rails exposing many U.S. citizens to criminal liabilities. Erik hides in the shadows … and uses [FSG] for legitimacy.”

I get that FSG claims no part in this, but seriously, what did you expect when you went into business with this guy? It’s not as if his past was some big secret.

The Libyan proposal, reviewed by The Intercept, was code-named Operation Lima. It offered the Libyans an array of military equipment and services — including weaponized vehicles, helicopters, boats, and surveillance airplanes — to help stabilize eastern Libya. The ground force, according to a person involved with the plan, would consist of a troop of former Australian special operations commandos. Given the instability of the government and Prince’s inability to navigate complex Libyan factions to vet potential partners, he had trouble finding the right power brokers to help sell the proposal.

“Money laundering for Libyan officials using a Chinese bank — that is the issue that pushed it over the edge” for the Justice Department, said the second former intelligence official.

The U.S. spies monitoring Prince soon discovered that he had traveled to the Chinese-controlled peninsula of Macau in an effort to open a bank account, according to two people familiar with the investigation. A well-connected source within the Macau banking community told The Intercept that Prince first attempted to open an account at the Macau branch of a European-connected bank, but was denied after a review by the bank’s European headquarters.

Later, Prince traveled to Beijing, where he met with Chinese agents from the Ministry of State Security, according to the second former intelligence official and a source familiar with the meeting.

In January, Prince returned to Macau and opened an account at the Bank of China, according to several sources, including the second former intelligence official and the source with close connections to Macau’s banking community.

“It was not a personal account,” said the former U.S. intelligence official briefed on the investigation. “He was doing it for the purpose of what is considered now — in the investigation — money laundering on behalf of the Libyans.”

Toensing, Prince’s lawyer, confirmed that Prince successfully opened an account with the Bank of China. “He opened an account on behalf of a business,” she said. Toensing declined to say for which business he opened the account, but said that it complied with U.S. banking regulations. “This is not an FSG bank account,” a spokesperson for FSG told The Intercept.

While Prince’s re-invented Libya “border security” proposal was framed as a means of stopping migration, sources with knowledge of Prince’s business strategy allege that he had greater ambitions in that country. One person involved in Prince’s plan said the anti-migration force was seen as a vehicle for Prince to build a “backdoor” for so-called kinetic, or lethal, operations in Libya — a form of mercenary mission-creep. “During the day, you do interdiction of migrants — not kinetic,” said the person involved in the plan. “But those routes are used by weapons smugglers and drug traffickers at night. Insurgents too. Erik’s guys can then be offered to the Libyans to help with their other problems. That’s how you get kinetic.”

The plan called for a series of “border security” bases housing intelligence centers, helicopters, surveillance airplanes, and weaponized vehicles. Prince proposed a fully equipped, contemporary military force to be staffed in part by foreign mercenaries.

Among the concerns of government investigators is that Prince’s attempts to provide defense-related services to Libya and other countries violate U.S. defense export regulations. Under federal law, U.S. citizens seeking to offer military services or technologies to Libya must have a license certifying that the services or articles are approved under the International Traffic in Arms Regulations, or ITAR. “Many of these services and articles are designed to kill people or defend against killing people,” said John Barker, a former deputy assistant secretary of state for export controls. “To protect U.S. national security and foreign policy as well as that of its allies, the U.S. requires prior authorization.”

An FSG official said the company did not know if Prince obtained a license for his activities in Libya, but noted that he did not have one in his capacity as FSG’s chairman. One of Prince’s Libya proposals reviewed by The Intercept lists FSG as the commercial vendor for the project.

Prince has run up against ITAR in the past. In 2010, Prince sold most of his equity in the companies that fell under the Blackwater umbrella. Claiming that left-wing activists, Democratic politicians, and lawsuits had destroyed his companies, he left the United States and became a resident of Abu Dhabi. The remnant of his network was renamed Academi LLC. Federal prosecutors eventually attempted to prosecute Prince’s former companies, culminating in a 2012 deferred prosecution agreement to settle a lengthy list of U.S. legal and regulatory violations committed from 2005 through 2008 when Prince was in charge, including ITAR violations.

A senior official involved with the Blackwater-related litigation, who has since left the government, told The Intercept that the Obama administration’s continued willingness to award contracts to former Blackwater entities while the case was active was a fatal impediment to a successful prosecution. The official, comparing the former Blackwater empire to a drug syndicate, added that prosecutors could not get anyone under Prince to testify against him personally. “This is very much the concern,” the former official told The Intercept. “You push the buttons on the company, but the main bad guy gets away and does it again.”

In federal court filings, Prince’s former companies admitted to providing — on numerous occasions during Prince’s tenure — defense goods and services to foreign governments without the required State Department licensing. In some cases, they admitted to providing services even after failing to obtain a license from the State Department.

As part of their settlement with the government, Prince’s companies ultimately agreed to pay nearly $50 million in fines and other penalties and to implement compliance procedures to ensure such illegal activities did not continue. In September 2015, the deferred charges were dismissed after the U.S. government certified that the companies had “fully complied” with all of its conditions.

Right, because fining a mercenary sociopath is such an effective deterrent. This is what you get when you use deferred prosecutions on these people. They get right back at it. Same exact thing happened with the banks. The U.S. justice department is not just worthless, it’s dangerous.

At that point, Prince was already deep into creating new companies registered outside of the United States and appeared poised to return to the conduct that had marked his time at the helm of Blackwater.

An internal document from Prince’s inner circle, reviewed by The Intercept, shows his team openly discussing the need to avoid U.S. and international defense export regulations and to mask the involvement of Prince and his cohort in efforts to provide mercenary services and military equipment to foreign governments. “Erik is always pressing the limits as to what is possible,” said the close associate of Prince’s.

According to multiple sources familiar with Prince’s activities, as well as documents reviewed by The Intercept, Prince is considering an invitation to speak at a conference later this month in China sponsored by the country’s main domestic security organization, the Ministry of Public Security.

Internally, FSG executives determined that any presentations by the company’s U.S. citizen personnel at the conference could potentially violate U.S. laws against providing defense advice to China. Smith issued a directive that no U.S. personnel from FSG were authorized to attend. Erik Prince, Smith told his staff, would need to make his own decision.